Multiplier TWA calculation

The multiplier component uses a Time-Weighted Average (TWA) calculation to determine user holding levels for XRD, LSUs, and other whitelisted derivatives. This ensures fair multiplier allocation based on actual holding duration.

Time-Weighted Average (TWA) Calculation

TWA = (∑(balance_i × time_interval_i)) ÷ total_time

Where:

• balance_i is the account balance during interval i
• time_interval_i is the duration of interval i
• total_time is the sum of all time intervals

Flow Diagram

flowchart TD
    Start[Record initial balance and timestamp] --> B[Transaction stream]


    B --> C{Balance change?}
    C -->|No| D{End of period?}
    D -->|No| B
    D -->|Yes| E[Calculate time-weighted average]

    C -->|Yes| I[Record updated balance and timestamp]

    E --> N[End]

Examples

Example 1: Consistent Balance

If an account maintains 10,000 XRD for the entire 7-day period:

• Balance: 10,000 XRD
• Duration: 7 days
• TWA = (10,000 × 7) ÷ 7 = 10,000 XRD

Example 2: Balance Increase

If an account starts with 5,000 XRD for 1 day, then increases to 10,000 XRD for the remaining 6 days:

• 5,000 XRD for 1 day = 5,000 × 1 = 5,000 XRD-days
• 10,000 XRD for 6 days = 10,000 × 6 = 60,000 XRD-days
• Total: 65,000 XRD-days over 7 days
• TWA = 65,000 ÷ 7 = 9,285.71 XRD

Example 3: Temporary Zero Balance

If an account holds 10,000 XRD for 3 days, then 0 XRD for 3 days, then 10,000 XRD for 1 day:

• 10,000 XRD for 3 days = 10,000 × 3 = 30,000 XRD-days
• 0 XRD for 3 days = 0 × 3 = 0 XRD-days
• 10,000 XRD for 1 day = 10,000 × 1 = 10,000 XRD-days
• Total: 40,000 XRD-days over 7 days
• TWA = 40,000 ÷ 7 = 5,714.29 XRD

Example 4: Last-Minute Balance

If an account holds 0 XRD for 6 days and only adds 10,000 XRD on the last day:

• 0 XRD for 6 days = 0 × 6 = 0 XRD-days
• 10,000 XRD for 1 day = 10,000 × 1 = 10,000 XRD-days
• Total: 10,000 XRD-days over 7 days
• TWA = 10,000 ÷ 7 = 1,428.57 XRD

Implementation

The TWA calculation ensures that:

• Users are rewarded for consistent, long-term holding
• Brief spikes or last-minute deposits have minimal impact
• The multiplier accurately reflects actual asset holding behavior
• Anti-farming controls are enforced through time weighting